INTRODUCTION:
For every possible IMPLAN Region, all IMPLAN Industries have a unique Leontief Production Function. IMPLAN collects data to determine the Leontief Production Function for each Industry for each Region and Year available in IMPLAN in terms of dollars. The Leontief Production Function, in dollars, is converted to percentages of Output. The Leontief Production Function in percentages determines how each Industry allocates Output when modeled via an Industry Event.
DETAILS:
Output is defined as:
We show this visually like this:
To take a look at how this differs across Industries, five different Industries at the US level for 2018 are shown.
Industry 4 - Fruit Farming
Industry 25 - Silver ore mining
Industry 76 - Confectionery manufacturing from purchased chocolate
Industry 455 - Legal services
Industry 499 - Independent artists, writers, and performers
Scanning these we can see differences across the Industries.
|
Industry |
Intermediate Inputs |
Employee Compensation |
Proprietor Income |
TOPI |
OPI |
|
4 - Fruit farming |
42% |
16% |
17% |
0.01% |
25% |
|
25 - Silver ore mining |
50% |
23% |
1% |
5% |
21% |
|
76 - Confectionery manufacturing from purchased chocolate |
77% |
14% |
1% |
1% |
7% |
|
455 - Legal services |
29% |
36% |
7% |
5% |
23% |
|
499 - Independent artists, writers, and performers |
15% |
19% |
52% |
6% |
9% |
Fruit farming, mining, and manufacturing all have high percentages in Intermediate Inputs. These Industries all need to purchase more inputs for production than other Industries like those that provide services. Of the five Industries selected, Legal services has the highest percentage of Output going toward Employee Compensation and anyone that has paid legal fees understands why this is the case. Independent artists, writers, and performers have the highest percentage going towards Proprietor Income. Of these five Industries, artists are the most likely to be self-employed.
Fruit farming also has a very tiny percentage in TOPI (likely due to subsidies). Fruit farming and Legal services both have higher relative percentages of their Output going to OPI.
So, as you can see, Output differs by Industry in IMPLAN. Each Region will also differ for each Industry, so you can not only compare Industries in the same Region, but you can also compare how Output differs for a single Industry in multiple regions.
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Output, Value Added, & Double-Counting
Written January 7, 2020
Updated February 26, 2020